The agency, which currently has the South Africa two notches above junk status, will visit the country later this month to investigate further.

According to independent economist Thabi Leoka, Moody's decision comes as no surprise. The ratings agencies want to give South Africa a chance to implement the plans outlined in the February Budget. They want to see if the country can rectify its fiscal deficit in the midst of large outstanding government projects like the NHI and the nuclear programme .

If Moody's downgrades us in June, it will only be aligning itself with Fitch Ratings, who have us one notch above junk status.

— Thabi Leoka, economist at ArgonAssetManagement

Leoka explains just what the effect of junk status would mean for the SA economy.